System and method for income planner

• US 20020188536A1
• Filed: 06/12/2001
• Published: 12/12/2002
• Est. Priority Date: 04/26/2001
• Status: Active Grant

• Current Assignee: Charles Schwab & Company Incorporated (Charles Schwab Corporation)
• Original Assignee: Charles Schwab & Company Incorporated (Charles Schwab Corporation)
• Inventors: De Vincenzi, Mark, Milosavljevic, Olga, Peterson, James
• Granted Patent: US 8,768,800 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

The invention forecasts a customer'"'"'s annual withdrawals, manages order of withdrawal, forecasts likelihood that assets at retirement will provide needs for retirement, and provides ability to perform alternative analysis by changing various retirement goals, such as preservation of principal, amount of income desired, or expected length of retirement.

Claims

1. A method for forecasting a likelihood that assets at retirement meet in-retirement goals, such as, but not limited to, an annual income withdrawal plan, an estate goal, and a years in retirement goal, comprising:

inputting said income goal, said estate goal, said years in retirement goal, and a current asset allocation;

performing analysis based on said goals and their prioritization and said current asset allocation; and

forecasting, by using results of said analysis, said likelihood that said assets at retirement meet said client defined priority goal in-retirement goals.

2. The method of claim 1, wherein said forecasting is based on outside and inside holdings.

3. The method of claim 1, further comprising the step of projecting annual snapshot cash flows from said current asset allocation and determining if a gap exists between said projected cash flows and said income goal.

4. The method of claim 3, wherein said cash flows comprise dividend and interest sources, and non-fluctuating sources.

5. The method of claim 4, wherein said dividend and interest sources comprise equity dividend, fixed income, and cash payments, and wherein said non-fluctuating sources comprise income property, social security, and pension payments.

6. The method of claim 3, further comprising the step of providing a current performance planning table, wherein said table allows for assessing approximate current yield and total return information in order to determine which holdings of said assets provide cash flow versus growth required to meet said in-retirement goals.

7. The method of claim 3, further comprising a current summary showing a breakdown of said cash flow into said dividend and interest sources, said non-fluctuating sources, total cash flow, and said income goal.

8. The method of claim 3, further comprising following an income stream withdrawal strategy, wherein said strategy provides tax advantages and wherein said income comprise capital gains, principal draw down as well as interest and dividend payouts.

9. The method of claim 8, wherein said withdrawal strategy further comprises designating when and how much to withdraw from taxable, 401K, traditional IRA, and Roth IRA accounts.

10. The method of claim 8, further comprising an asset draw down schedule over each retirement year.

11. The method of claim 3, further comprising determining required minimum distribution (RMD) income streams based on total value of tax deferred assets.

12. The method of claim 11, further comprising a report showing annual tax-deferred account withdrawals, and year end tax deferred account balances.

13. The method of claim 3, further comprising providing financial and non-financial alternatives in order to attempt to increase said likelihood of meeting said retirement goals.

14. The method of claim 13, wherein said non-financial alternatives increase said likelihood by requiring a relaxing of at least one of said in-retirement goals.

15. The method of claim 13, wherein said financial alternatives attempt to increase said likelihood by altering said asset allocation and thereby assuming a better diversified portfolio.

16. The method of claim 14, further comprising a report showing said in-retirement goals and said likelihood versus said modified in-retirement goals, said modified in-retirement goals comprising said at least one of said relaxed in-retirement goals, and showing said subsequent possible increased likelihood.

17. The method of claim 15, further comprising a report showing said in-retirement goals and said likelihood versus said altered asset allocation, and showing said subsequent possible increased likelihood.

18. The method of claim 15, wherein asset allocation preferences are incorporated.

19. The method of claim 15, further comprising action plans for attempting to increase said likelihood, said action plans comprising means for conveying whether to buy or sell said assets.

20. The method of claim 19, wherein each asset class holding are separated from each other small company holdings are separated from large, international, and fixed income company holdings.

21. A method for forecasting a likelihood that assets at retirement meet in-retirement goals comprising an annual withdrawal goal, an estate goal, and a years in retirement goal, said method comprising:

inputting said withdrawal goal, said estate goal, said years in retirement goal, and a current asset allocation;

performing analysis based on said goals and said current asset allocation;

forecasting, by using results of said analysis, said likelihood that said assets at retirement meet in-retirement goals;

managing an order of withdrawal, such that said in-retirement goals are met in an efficient way; and

providing an ability to perform alternative analysis by modifying said in-retirement goals.

22. The method of claim 21, wherein said current assets comprise outside and inside holdings.

24. The method of claim 23, further comprising:

generating said current 12 month rolling or historic rolling year cash flow from inside only accounts by cash flow category, and comparing said generated cash flow to said income goal.

25. The method of claim 23, wherein said generated cash flow information is based on an annual basis and/or a monthly basis.

26. The method of claim 23, further comprising bar charts, tables, and/or other graphical displays of information.

27. The method of claim 23, wherein said dividend reinvestment status is by cash flow category.

28. The method of claim 23, wherein said dividends reinvested are foregone cash flows.

29. The method of claim 23, wherein potentially under-performing assets are determined using growth and income components of each asset'"'"'s return.

30. The method of claim 23, further comprising:

generating a full printed report.

31. The method of claim 23, adaptable to be used on the World Wide Web (Web), retail desktops, phone service center desktops, and the like.

32. The method of claim 23, adaptable to be used in a self-service mode of operation, or in an assisted service mode of operation by providing different user interfaces, and the like.

33. The method of claim 23, adaptable to be incorporated in a suite of tools.

35. The system of claim 34, wherein said current assets comprise outside and inside holdings.

23. A method for determining and communicating to a customer snapshot of the amount of dividend and interest cash flow in the current 12 month rolling or historic rolling year generated by said customer'"'"'s current portfolio, said portfolio comprising inside and outside accounts, comparing said income to an income goal, and assisting said customer in narrowing or closing a gap between said income goal and said current income amount, comprising:

any combination of downloading, entering, or updating a profile of said customer, and inputting said income goal;

any combination of importing, displaying, selecting, entering, and editing any of said customer'"'"'s inside accounts;

any combination of importing, displaying selecting, entering, and editing any of said customer'"'"'s outside accounts;

any combination of importing, displaying, selecting, entering, and editing a collection of said customer'"'"'s other non-security sources of income;

generating a 12-month rolling or historic rolling year cash flow from all said sources of income by cash flow category, and comparing said generated 12-month rolling or historic rolling year cash flow to said customer'"'"'s annual cash flow goal;

generating a cash flow report, said report comprising, but not limited to, any of;

an estimated annual cash flow for each asset;

approximate current yield of each asset;

current value of each asset;

dividend reinvestment status for each asset;

relevant cash flow category benchmarks; and

a total dollar sum of dividends reinvested for said current calendar year;

generating a cash flow versus growth performance report, said performance report comprising, but not limited to, any of;

a list value by yield for each asset;

an annual income by each asset;

a current yield of each asset;

1, 5, and/or 10 year total return data;

current value and relevant cash flow category benchmarks, thereby allowing said customer to compare said assets'"'"' performance to said relevant cash flow category benchmarks and/or appropriate historical performance; and

generating a general advice document highlighting under-performing assets of said assets, and making general recommendations for said narrowing or closing of said gap.

34. A system for forecasting a likelihood that assets at retirement meet in-retirement goals comprising an annual withdrawal goal, an estate goal, and a years in retirement goal, comprising:

means for inputting said annual goal, said estate goal, said years in retirement goal, and a current asset allocation;

means for performing analysis based on said goals and said current asset allocation;

means for forecasting, by using results of said analysis, said likelihood that said assets at retirement meet in-retirement goals;

means for managing an order of withdrawal, such that said in-retirement goals are met in an efficient way; and

means for providing an ability to perform alternative analysis by modifying said in-retirement goals.